(MENAFN- ProactiveInvestors - N.America) In the Soviet era the Unkur project in Siberia, now held by Azarga Metals Corp (CVE:AZR), was commonly held to be a copper deposit.
Certainly, there's plenty of copper there, as the old Russian data shows. Four separate resource estimates were prepared between 1972 and 2014, and all showed a preponderance of copper over the secondary metal, silver.
The most recent Russian resource estimate reckoned Unkur to contain 173,400 tonnes of copper in over 20 million tonnes of ore at grades running at an average of 0.85%.
This resource estimates resides in the highest P1 Russian categorisation, but only goes down to a depth of 300 metres, which was deemed to be the maximum depth an open pit could reach.
The actual mineralisation runs much deeper, as demonstrated by an earlier resource from 1979, which put the total metal contained at over 1 million tonnes of copper held in more than 142 million tonnes of ore.
That's quite some deposit right there, but Azarga's experienced chief executive Dusty Nicol reckons there could be far more to it than that.
He's worked with Russian resource estimates many times in the past and generally finds their methodology to be sound, if conservative.
This case is no different, although for his own part Nicol is reluctant to commit to numbers of any kind until Azarga has put together its own resource, done to NI43-101 standards, which is due early in the new year.
But what he will say is that although the copper is very substantial, it may be the silver that eventually comes to the fore.
'The Soviets focussed on the copper and essentially ignored the silver,' he says. 'But I think Unkur is eventually going to end up as a silver story.'
The 1988 resource showed Unkur to contain several thousand tonnes of silver, but Nicol reckons there could be more to come, both from the silver and the copper.
'The deposit was quite thoroughly explored during the Soviet era,' he says.
'The Soviets generated a sizeable resource with upside potential. But because of the way they'd explored it I felt there was a good chance they'd underestimated the size and grade. And some of the drilling we've been getting indicates that my hunch was right.'
He adds that because of the limits to the drilling technology that was available when the earlier Russian work was done, drill core recovery often came in at just 40%. The drill campaign that's currently underway should deliver improved recoveries and a more market friendly resource model.
We'll know more when the 43-101 report comes out next year, but when it does expect things to move pretty fast.
'My goals are to get through the maiden 43-101,' says Nicol.
'And if that's as good as I expect it will be I will be asking my board for budget to drill further with the objective of doing a preliminary economic assessment by the end of 2017.'
The money will likely be available if he wants it, as Azarga has just announced that it's increased the amount of its private placement from C$1mln to C$1.1mln.
'I'm very confident that that will close,' he says. 'I'll then have permission to ramp up the drilling.'
So watch this space for drill results throughout the rest of the fourth quarter bearing two things in mind: one, that a resource update is imminent; and, two, that ascribing a grade of, say, 60 grams per tonne to the old Russian silver resource could make Unkur the third or fourth largest silver project in the world.
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